Stock advice in actual English.
Joined Sep 2, 2009
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Two Quick Things This Morning – Rentals and SKUL

I’ll start with SKUL. I’m thinking of picking a trade here – it’s a company that sells headphones going into the holiday season, and they have a 60% short / float. I’m sure the company is garbage, but I like the idea of a short squeeze.

I’ll end with rentals – I’ve been reading a steady stream of content trying to argue that the rental boom is done. The reasoning here is that a monthly mortgage payment is now about as expensive or in some cases less than monthly rents, in certain areas.

The articles have concluded that this pricing will lead to incentives to take up homeownership over “wasteful” renting – culminating in reduced occupancies and perhaps downward rent pressure.

It’s actually a pretty convincing thesis. I do think, however, they are glossing over one teensy, tiny, little detail…

Where are these people getting mortgages?

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  1. dancin

    Exactly. Nobody currently renting is getting a loan unless they’re buying something very small and well within their means. When the banks put those with 800+ scores through the ringer just to refinance a house that has a $100,000+ cushion in equity, they aren’t lending to someone who never owned a house before.

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